The S&P CNX Nifty tested the lower-end support of 6,120 to close at 6,145 on short-covering at the lower level.
The October futures closed at 6,183, a 38-point premium to the spot, and saw intra-day short-covering by bears and fresh long build-up by bulls. The Nifty futures moved in a narrow band of 30 points in the value area (6,180-6,210), which resulted in a decline in volume by five million shares. There was sell-side volume above 6,210 while bears covered short positions below 6,180.
The market picture chart, which provides an insight into intra-day price and volume action, is hinting at another dull trading session tomorrow. The poor trading volume from liquidity suppliers in the initial balance time period of 60 minutes shows reluctant sellers. The time-price opportunities (TPO) data suggest upside resistance for October futures at 6,222.50 while value traders see a buying opportunity around 6,147.50.
Options traders see limited scope for the market to fall below 6,100 as the 6,100-strike calls saw poor volumes and unwinding of short positions. The 6,200-strike calls saw change of hands when the Nifty was trading in the negative zone. The participants built short positions in the 6,300-6,400-strike calls as they expected resistance above 6,248. The trading pattern in Nifty puts hints at 6,000 as the lower-end support.
Among stock futures, a strong upside movement is expected in Reliance Industries and Bajaj Auto tomorrow. The October futures of RIL, which closed at Rs1,033, saw 85 per cent volume above Rs1,022, mostly on account of short-covering by top traders. The TPO data suggest a price of Rs1,047 while volume-based resistance is expected at Rs1,055.
The October futures of Bajaj Auto rose 3.22 per cent to close at Rs1,588.65 on short-covering of 1.10 million shares. The trading data indicate poor supply from initial liquidity providers and short-covering by bears at higher levels. The market picture chart indicates volume-driven price level of Rs1,637 for Bajaj Auto.